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Capgemini raises 2021 targets on booming tech demand

Capgemini raises 2021 targets on booming tech demand

Capgemini raises 2021 targets on booming tech demand
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By Reuters Jul 28, 2021 11:03:44 AM IST (Published)

French consulting and IT services provider Capgemini raised its 2021 guidance on Wednesday as it benefits from a global surge in demand for tech and cloud-based solutions that picked up speed during the pandemic. The company now expects 2021 revenues to be up between 12 percent and 13 percent, an operating margin of 12.5 percent to 12.7 percent, and an organic free cash flow above 1.5 billion euro (USD 1.77 billion).

French consulting and IT services provider Capgemini raised its 2021 guidance on Wednesday as it benefits from a global surge in demand for tech and cloud-based solutions that picked up speed during the pandemic.

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The company now expects 2021 revenues to be up between 12 percent and 13 percent, an operating margin of 12.5 percent to 12.7 percent, and an organic free cash flow above 1.5 billion euro (USD 1.77 billion).
It had previously forecast 2021 revenue growth in a range of 7 percent to 9 percent, an operating margin of 12.2 percent to 12.4 percent, and an organic free cash flow above 1.3 billion euro.
"These results are underpinned by two factors: a structural acceleration in client demand for technology and the relevance of our strategic direction," Chief Executive Officer Aiman Ezzat said in a statement.
Capgemini reported strong growth in its infrastructure and cloud services, helping to bring sales in its operations and engineering business up over 10 percent in the second quarter.
With employees having to work from home during extended pandemic restrictions and consumers moving further toward online services, companies had to accelerate their shift to digital platforms in order to keep their businesses afloat.
The European tech index reached an all-time high in July and was up about 20 percent in the first half.
French peer Dassault Systemes and US rival Accenture also raised their 2021 forecasts, betting on strong demand for their digital and cloud services from businesses looking to strengthen their operations as they work remotely.
Capgemini's sales rose 14.9 percent to 8.71 billion euro in the first six months of 2021, bringing its net profit to 443 million euro, up 42 percent.
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